1) Define sports marketing and entertainment marketing2) Explain the two primary types of sports and entertainment marketing3) Compare and contrast sports marketing and entertainment marketing4) Describe the seven functions of marketing5) Understand what makes sports and entertainment products unique6) Explain the concept of competition for entertainment dollars7) Identify the five P’s of event marketing8) Explain the event triangle
Unit two describes the basic concept of sports and entertainment marketing and highlights the idea that sport is a form of entertainment. Students will be introduced to the fundamental concept of sports and entertainment marketing: the marketing of sports versus the process of marketing through sports.
Students will also begin to familiarize themselves with general marketing principles that are integrated within the framework of sports and entertainment business. They will be introduced to marketing philosophies such as defining the primary marketing functions and understanding what industry marketers are trying to achieve. Unit two will also provide an introduction to how innovation and advances in technology have changed not the sports and entertainment marketplace.
Lesson 2.1 Sports & Entertainment Marketing DefinedLesson 2.2 The Fusion of Marketing with Sports & Entertainment Lesson 2.3 Sports ARE EntertainmentLesson 2.4 Primary Marketing FunctionsLesson 2.5 Understanding the Sports & Entertainment ProductLesson 2.6 Competition for the Entertainment DollarLesson 2.7 Reaching ConsumersLesson 2.8 Introduction to Event Marketing & Management
Lesson 2.1Sports and Entertainment Marketing Defined
A. Marketing1. Marketing is the process of developing, promoting, and distributing products, or goods and
services, to satisfy customers’ needs and wants 1
2. The term “marketing” has grown to encompass many business activities such as selling, promotion and publicity
B. Sports1. Webster’s dictionary defines sports as “a source of diversion or physical activity engaged in
for pleasure”a. Sports can be a participation or spectator activity, and it is a form of entertainment
either way2. When we examine sport defined in terms relating to the sports and entertainment industry,
we see a slight variation in definitions. Consider the following definition: “Sport, as used in contemporary sport management and in relation to the sport business industry, denoted all people, activities, businesses, and organizations involved in producing, facilitating, promoting, or organizing any sport business, activity, or experience focused on or related to fitness, recreation, sports, sports tourism, or leisure” 2
a. This definition incorporates a business-oriented, broader description of the term, helping us to understand the unique nature of sports and entertainment as an industry
C. Sports Industry1. The sports industry is the market in which the businesses and products offered to its buyers
are sport related and may be goods, services, people, places or ideas 3
D. Entertainment1. Webster’s offers the following definition: “To entertain is to amuse or to offer hospitality”2. Entertainment is whatever people are willing to spend their money and spare time viewing
rather than participating 4
E. Leisure time1. Leisure time is the time available to people when they are not working or assuming
responsibilities, often times referred to as “free time”2. It is the goal of the sports and entertainment marketer to provide a product or service that
can satisfy the needs and wants of those individuals who choose to be entertained during their leisure time
Lesson 2.2The Fusion of Marketing with Sports & Entertainment A. After examining the definitions of sports and of marketing, how do we integrate the two to paint
an accurate portrayal of the sports and entertainment marketing function? 1. In the book Sports Marketing: A Strategic Perspective, Matthew Shank defines sports
marketing as “the specific application of marketing principles and processes to sport products and to the marketing of non-sports products through association with sport.” 5
2. We define sports marketing as the act of using sports as a platform to market products or services and increase sales or the process the of marketing and selling the sports property itself
B. There are two types of sports and entertainment marketing, 1) Marketing through sports and entertainment and 2) Marketing of sports and entertainment1. Marketing through sports and entertainment
a. Companies use sports and entertainment as a vehicle to gain exposure for their productsi. Coca-Cola, McDonald’s, Panasonic, Visa, General Electric and others spending
millions to sponsor the 2016 Summer Olympic Games in Rio de Janeiro as a tool to brand their product globally on the international stage
ii. Gatorade affiliating its product with athletes like Peyton Manning, Serena Williams, Eli Manning, Cam Newton, Paul George, Abby Wambach and Bryce Harper(a) Click here to see a commercial that shows how Gatorade leveraged their
relationships with athletes to connect their brand to the 2014 World Cup, iii. A CEO entertaining potential customers at a PGA Event in the hospitality area as a
sales tooliv. HP serving as presenting sponsor of the Sundance Film Festival
b. Product placement (also called product integration) to promote a specific product i. Audi vehicles being prominently featured in the blockbuster film, Iron Man 3ii. Click here for a slideshow displaying more brands featured in the filmiii. Judges on the hit TV show American Idol drinking Coke products during episodes
2. Marketing of sports and entertainmenta. The marketing of the sports and entertainment products themselves
i. The Potomac Nationals minor league baseball club offering a “holiday” ticket package to fans
ii. The Kansas City Royals branding the 2013 season with the slogan “This Year, We're Trying to Win” in an effort to communicate the message of re-building a franchise to the fan base
iii. Disney Studios spending over $250 million to produce and promote the 2013 box office bust The Lone Ranger 6 (a) The Hollywood Reporter recently suggested that, based on information from
industry insiders, marketing a film worldwide now costs around $175 million iv. A country club offering a special rate to increase its membershipv. New Balance advertising the launch of a new sneaker or shoe linevi. Field Turf selling and installing a synthetic grass football field at a high school
C. Sports marketing vs. Sports management 1. The field of study known as sports marketing is often confused with sports management,
but how do we differentiate between the two?a. Sport management is the study and practice of all people, activities, businesses or
organizations involved in producing, facilitating, promoting or organizing any sport-related business or product 7
b. Although the terms are often used interchangeably, sports management is best described as the application of management concepts and principles to the sports industry while sports and entertainment marketing refers to the marketing concepts and principles to both the sports and entertainment industries
c. Theoretically, sports marketing is considered a function of the broader field of study, sports management
2. Sport management areas of study might include: a. Sport lawb. Facility managementc. Human Resourcesd. Sport governancee. Leadership
3. Sports marketing activities could include:a. Tostitos sponsoring the Fiesta Bowl b. A MLS team offering payment plan options for season ticket buyersc. The Big East athletic conference agreeing to a 7 year television contract in 2013 with
ESPN worth an estimated $130 million 8 d. A corporation’s purchase of a courtside tickets in a NBA Arenae. A sign or banner displaying a company’s logo on the dasherboards at a hockey rinkf. Coca-Cola paying for “pour rights” at an event or facilityg. A local restaurant sponsoring the local high school soccer teamh. A blimp flying over sporting events
i. Click here to see video of Met Life blimp behind scenes flying over Phoenix Openi. Fans receiving free bobble head dolls at a baseball gamej. Nike partnering with Microsoft to launch fitness technology with Nike+ Kinect Trainingk. Foot Locker stores offering special sales or coupons to help increase sales l. Eli Manning hosting Saturday Night Live
* TEACHER’S NOTE *
The key concept that should be the focus in Unit 2 is marketing through sports and entertainment and act of marketing the sports and entertainment products themselves. Students should be able to differentiate between the two and offer examples of each. Utilize the discussion topic presented in the PowerPoint presentation to reinforce this lesson. Students should also be able to distinguish between sports management and sports marketing. Refer to the “stadium project’ to help illustrate this concept. ALSO, for a unique twist on a stadium project, please see the “Google Earth Stadium Project” located in the “IDEA SHARE & BONUS MATERIAL” folder on your CD-ROM.
D. Entertainment marketing 1. Entertainment marketing is the process of developing, promoting, and distributing
products, or goods and services, to satisfy customer’s needs and wants through entertainment, or any diversion, amusement, or method of occupying time 9
a. Entertainment marketing can be focused on both content and delivery i. For example, a studio makes money by producing films (content) and the theater
(delivery) makes money showing the “product” (along with concessions)ii. Much like paying rights fees to sports leagues, broadcast companies also pay for
the rights to broadcast major television events(a) According to the Hollywood Reporter, NBC is paying an estimated $21.5 million
per year in 2014 for NBC through at least 2018 for the rights to broadcast the next four Golden Globe shows
2. Entertainment presents itself in many formsa. Examples of entertainment
i. Seeing the Houston Symphony perform at Jones Hall in downtown Houston ii. Attending a LSU Tigers football gameiii. Reading one of Suzanne Collins’ novels in The Hunger Games trilogyiv. Visiting the Seattle aquariumv. Going to a Zac Brown Band or Adele concertvi. Listening to the newest Justin Timberlake song on your mp3 playervii. Watching the Broadway musical “Lion King”viii. Going to the Ringling Bros. and Barnum & Bailey circus at the American Airlines
Center in Dallasix. SeaWorld Orlando opening the new attraction ‘Antarctica: Empire of the Penguin’
and Universal Orlando opening Transformers: The Ride 3D in 2013
Lesson 2.3Sports ARE EntertainmentA. Comparing and contrasting sports and entertainment
1. There are many similarities between sports and other forms of entertainment as each activity is one that entertains or occupies our timea. Watching a Broadway showb. Listening to music on an mp3 playerc. Watching a movied. Watching a football gamee. Playing a game of soccer
2. According to Peter Guber (Chairman and founder of Mandalay Entertainment, Co-owner of the NBA’s Golden State Warriors and former studio chief at Columbia Pictures and chairman and CEO of Sony Pictures whose films have reportedly earned more than $3 billion in worldwide revenue and have been nominated for numerous Academy Awards): 10
a. “I believe sports is entertainment. I know there’s athletic excellence. But when I watch a game-let’s say I’m watching Charles (Barkley’s) show on (TNT)-it’s not just for the athletic excellence. Every piece of information is available in that telecast: scores, highlights, standings, analysis-0-right? I watch it because it’s entertaining. It’s about being entertained. It’s about being consumed. You’re a consumer, and you’re consumed by the entertainment, you’re engaged by the entertainment.” 11
b. ESPN broadcasts a number of events such as the national spelling bee and a hot dog eating contest. Because ESPN is the broadcaster, would you define those events as sports or entertainment?i. Click here to see ESPN’s intro/promo for the 2014 Nathan’s Famous Hot Dog eating
contest staged annually on July 4th, comparing eating champion Joey Chestnut to some of the most iconic, legendary athletes of all-time
3. There are several key differences between sports and entertainmenta. Unscripted
i. Consumers of sports do not know the outcome of the event in which they are participating
b. Emotional attachmenti. Traditionally, consumers of sports products have an emotional investment or
interest in the outcome of the event (winning vs. losing, close games vs. “blow outs”)c. Differences in customer loyalty
i. Customer loyalty is a customer decision to become a repeat consumer of a particular product or brand
ii. Entertainment consumers lack the desire to be team or brand loyal, but rather want only to satisfy their own entertainment needs
iii. If a company’s movie, book, sitcom, amusement ride, video game, magazine, CD, DVD or video does not deliver the expected level of entertainment, it is likely that the consumer will turn to a competitor’s product
d. Despite the differences, sometimes it can be difficult to differentiate between sports4. Integration of sports with entertainment and entertainment with sports
a. Cross promotion is the convergence of two entertainment properties working together to market products or servicesi. Bruno Mars performing at half time of the 2014 Super Bowl and Lorde (among
others) performing at the 2013 Preakness Stakes(a) In fact, Super Bowl halftime performers do not get paid. Click here to read why.
ii. Major League Baseball partnering with HBO to cross promote Opening Day with the season premiere of hit series, ‘Game of Thrones’
iii. ESPN’s ESPY awards(a) In 2014, ESPN also collaborated in cross promotional campaigns with the
History channel to promote two hit shows, “American Pickers” and “Vikings” (the cross promo helped ESPN build awareness when they rolled out a brand new SportsCenter set)(i) Click here for the “American Pickers” spot(ii) Click here for the “Vikings” spot
iv. Converse engaging in a cross promotion by teaming with the Gorillaz to release a co-branded Chuck Taylor sneaker collection along with a song called "DoYaThing," which featuring Gorillaz, Andre 3000 and former LCD Soundsystem frontman James Murphy
v. Occasionally two sports properties may choose to engage in cross-promotion as the Indiana Pacers and Indianapolis 500 did during the 2013 NBA Playoffs or when newly acquired star for the Chicago Bulls, Pau Gasol, threw out the first pitch at a Chicago White Sox game in 2014 12
b. Cross promotion can be an effective sales and branding tool for all parties involvedi. Variety.com reports that a significant factor in ESPN’s successful launch of its
Chicago-based website on all things Windy City was cross promotion, suggesting the cable company used “plenty of cross-promotion as a way to attract listeners to the site” 13
(a) It took just six months for ESPNChicago to become the city’s top sports site, attracting about 590,000 unique visitors in the month of June alone while the city’s historic newspaper company’s (Chicago Tribune) online sports section drew just 455,000 unique visitors 14
c. However, not all cross promotions are successfuli. 20th Century Fox engaged in several cross promotional efforts, including a tie-in
with TNT and the NBA playoffs and an advertising campaign with Farmers insurance, to promote the release of the film "X-Men: First Class”, yet the film was largely underwhelming at the box office, yielding around $36 million less in its opening weekend than 3 of the other 4 installments of the film’s franchise (the third film, “X-Men”, did just as poorly)
ii. A badly botched a Spider-Man 2 promotion in which MLB had planned to feature the Spider-Man logo on each base during the All-Star Game provides a cautionary tale to marketers considering cross promotional strategies. The league received such opposition from fans and baseball purists that the promo was eventually pulled. 15
A. Pricing1. Assigning a value to products and services on the basis of supply and demand
a. Tickets to the Super Bowl are very expensive because demand is high while tickets to see two marginal teams compete during the pre-season will be less expensive, particularly if the game is not sold out, because demand is lower
b. In 2013, the New York Jets chose to lower the prices on about 5,000 seats combined for season ticket holders in the 300-level and in the club seating areas (in some cases dropping prices from $700 to $255 for season tickets) at MetLife Stadium based on the supply and demand that impacted the previous year's sales in those areas 16
i. Click here to see how much of an impact ticket sales have on the planning process for the new Sacramento Kings arena
c. Despite the fact that Disney announced ticket price increases at both Disneyland and Disney World while eliminating many of the traditional discounts given to local residents, the majority of Disney parks enjoyed attendance increasesi. Click here to view a chart identifying theme parks with the highest attendance
numbers in 2013ii. Click here to view a graphic illustrating Disney’s increase in ticket prices
d. Tickets for the 2014 men's ice hockey gold medal game at the Sochi Olympics were unavailable within a half hour of going on sale online. Customers were able to buy a maximum of four tickets, with prices ranging from $233 and $1,132. 17
e. When demand fluctuates as frequently as it does in the ticketing world, companies must implement strategies to help identify the best price points to match demandi. This is why many organizations are moving toward a “dynamic pricing” structure
where games in higher demand cost more than the same ticket for a game with lower demand (more on dynamic pricing in unit 9)
B. Distribution1. Determining how best to get products and services to consumers
a. EA Sports sells their video game products at Target and in Best Buy stores, because they know their target consumers shop at those stores for video games and entertainment
b. On Demand and streaming services have become prevalent options for consumers in today’s marketplacei. As Apple tries to hold on to market share, they are constantly adding new streaming
content for their Apple TV product (such as HBO Go, ESPN) to appeal to a broader base of customers
c. Sports and entertainment companies must determine which distribution strategies will help to maximize sales, whether that is mass distribution in as many outlets as possible or partnerships with individual retailers to create exclusivity and drive demandi. Taylor Swift’s album release Red received a boost because the album was available
at several nontraditional retail outlets, including Starbucks, Target, Papa John’s Pizza and Walgreens, selling over 1.2 million copies in its first week 18
ii. To help boost interest in pre-sales of popular video game series Assassin’s Creed 4: Black Flag, game developer Ubisoft partnered with several retailers like Amazon, Best Buy and Game Stop to offer specific bonuses (like posters, in-game missions, etc.) 19
2. Sometimes a retailer or brand will arrange for exclusive distribution of a particular product or brand to drive traffic to their store or website
a. To promote the last year’s release of his album Magna Carta Holy Grail, Jay-Z inked an exclusive (and lucrative) partnership with Samsung to provide free copies of the album to one million Samsung cell phone and tablet owners before it was available for sale
b. Exclusive distribution doesn’t always guarantee success however, illustrated by the disappointing sales of Sears’ “Kardashian Kollection” 20
C. Promotion1. Communicating information about products and services to consumers2. Typically involves ongoing advertising and publicity and sales
a. In 2013, EA Sports announced a $100 "Anniversary Edition" for Madden NFL 25 that included a code offering buyers access to DirecTV's NFL Sunday Ticket——even if they weren't subscribers to the satellite TV service
b. GameFly, Inc., an online video game rental subscription service, announced a national summer-long promotion with Six Flags last summer, in which the online video game rental company offered Six Flags guests extended “free” trials of their subscription service as well as providing one million gift cards available for giveaway at toll booth exits at each park 21
c. Bank of America launched a promotion in the summer of 2013 providing free admission to museums and other cultural venues for customers, including 150 venues in 93 cities of 31 participating states 22
D. Financing 1. Creating a budget and revenue projections for a company’s marketing plan
a. In July of 2014, Under Armour bumped its annual forecast for sales for the second time, citing "increased confidence" in its footwear and international businesses. 23
b. Budgets and projections/forecasts are never an exact sciencei. The 2013 summer release of the film Star Trek Into Darkness was forecast to break
the $100 million barrier but made just $84 million, not good news for the studio after budgeting a reported $200 million to produce the movie 24
2. Analyzing the cost effectiveness of existing or previous marketing effortsa. The US Army chose to end its NASCAR sponsorship after the Air National Guard spent
$650,000 to sponsor a 2010 NASCAR Sprint Cup race that resulted in just 439 recruitment leads, none of which ended up joining the Army 25
3. Providing customers with flexibility in purchasing company products or servicesa. Like many professional sports franchises, MLB’s Washington Nationals offer payment
plans for customers purchasing ticket packages. According to the team’s website, the Nats’ “Grand Slam E-Z Payment Plan allows season ticket holders to pay a fraction of the total cost of their tickets in easy monthly payments. This is available for either Full, Half, or Partial Season Ticket Plans 26
E. Selling1. Communicating with consumers to assess and fill their needs, as well as anticipating future
needs2. Involves the following activities, cultivating prospective buyers (or leads) in a market
segment; conveying the features, advantages and benefits of a product or service to the lead; and closing the sale (or coming to agreement on pricing and services) 27
3. Many professional sports teams utilize a call center to revenue generated by ticket salesa. A call center is a physical location where calls are placed, or received, in high volume
for the purpose of sales, marketing, customer service; typically through the use of telemarketers
b. Call centers employ a staff to perform telemarketing activity with the goal of selling ticket packages over the telephone
c. Examplei. The University of Minnesota athletics department outsourced their ticket sales
operation to a third party organization (Aspire Group) to help boost ticket sales for Gopher athletic events. Aspire deployed a full-time sales staff to work in
Minneapolis on the effort. Said Gophers’ Associate Athletics Director Jason LaFrenz, “We need to put more butts in seats.” 28
(a) In 2014, The University of Texas also contracted The Aspire Group to manage the program’s athletic ticket sales and service, a program that generates more than $40 million in ticket revenue each year according to the Sports Business Journal
(b) Click here to read how outsourcing to a call center was part of Middle Tennessee State University’s strategy for building attendance at football games as they entered Conference USA last football season
F. Marketing information-management1. Gathering and using information about customers to improve business decision making27
a. Professional sports teams began offering smaller ticket packages (half-season, quarter-season, five-game packages) after determining through customer research that full season ticket plans were often too costly and/or time consuming for many fans to purchase.
b. As visitors pass through the turnstiles at Disneyland in California, guests are randomly selected to answer interview questions from friendly staff members equipped with hand held data recording devices. This provides Disney management with up to date information about park guests, such as where they are from, how many are in their group, and how many times they have visited the theme park in the past.
G. Product and service management1. Designing, developing, maintaining, improving, and acquiring products or services so they
meet customer needs 29
a. One of Nike’s product management efforts includes the “Nike Field Tester Program” in which selected applicants will wear Nike shoes for typically 4-8 weeks. Testers keep a daily written account of information relating to the product. Additionally, testers are required log the number of hours the shoes were worn each day, the surfaces shoes were worn on, observations regarding the shoe’s fit, performance and durability. 30
b. Executives from professional sports teams are always working to improve their product, recognizing the importance of fielding a competitive team to meet the demands of consumers (fans)
c. Following in the footsteps of the popular “app” ecosystem which allows anyone to create games for mobile devices, Microsoft announced that the release of its Xbox One gaming console would allow developers to create their own games 31
Lesson 2.5Understanding the Sports & Entertainment Product
A. Sports products1. Products
a. Products are tangible, physical goods as well as services and ideas 32
i. Tangible products are capable of being physically touched 33
b. Sports products are the goods and services designed to provide benefits to a sports spectator, participant or sponsor 33
c. Examples of sports productsi. Licensed merchandise - A Houston Rockets hatii. Participation - Tickets to a Fort Worth Cats baseball gameiii. Equipment and apparel - Louisville Slugger baseball bativ. Promotional items - A bobblehead giveaway/promotional itemv. Sports facilities - The Verizon Center arena in Washington, D.C.vi. Marketing research – A report on participation levels of soccer in the United States
provided by the American Sports Data research firmvii. Marketing / Management services – Services provided by Octagon Consulting
Group such as competitive analyses and sponsorship valuationsB. Entertainment products
1. Several segments of the entertainment industry rise to the top as predominant money makers
2. These segments include: a. Film and cinemab. Televisionc. Music (includes recorded music and concerts/shows)d. Radioe. Video gamesf. Theme parksg. Publications (newspaper, magazine, book)
C. The unique nature of sports and entertainment products1. Sports and entertainment products often share common characteristics of services2. Two primary characteristics of services
a. Services are perishableb. Services are intangible
3. Many sports and entertainment products are perishablea. Perishability is the ability or need to store or inventory a productb. Once a game or event has already taken place, they no longer carry a value and cannot
be sold i. According to Mullin, Sutton & Hardy in Sports Marketing: “No marketer can sell a
seat to yesterday’s game, yesterday’s concert or yesterday’s ski-lift ticket” 34
(a) According to data from Ticketmaster, over 50 million tickets to sporting events went unsold last year, representing roughly $900 million in lost/uncaptured revenue 35
c. Perishability can also apply to playing careers which impacts product qualityi. Dallas Mavericks owner Mark Cuban said in a recent interview, “I wrote a blog post
a few years back saying that NHL players lost more than 1 billion in wages for their
missed season. It could be more than that if the NFL walks out. The players can't ever get that money back. Their playing time is perishable.”
* TEACHER’S NOTE *
To see an interesting graphic relating to the ticket sales and the concept of perishability, have students review the lesson 2.5 student handout marked “Lesson 2.5 student handout – perishability”. The file can be accessed from your CD-ROM or online.
4. They are also often intangiblea. Intangible product attributes are the unobservable characteristics which a physical
good possesses, such as style, quality, strength, or beauty 36
i. Copyrights, logos, graphics and trademarks would also be considered intangiblesb. Even tangible items such as a soccer ball or music CDs have less significance than the
feeling or emotion that the activity itself reveals5. Examples of sports activities that would be considered intangible 37
a. The exhilaration we get from running our best marathonb. The thrill of winning a competitionc. The satisfaction of scoring well on a challenging golf coursed. The pride we feel when teams we support wine. The emotional attachment fans invest in their affiliation with a favorite teamf. The connection fans feel with other fans (whether they know them or not) supporting the
same players or teams D. Importance of a quality product
1. Even the best marketers and salespeople in the world can’t promote or sell an undesirable product. No matter how much effort an organization puts into its marketing, promotion and sales efforts, they will face challenges generating and sustaining interest in the product if they don’t offer consumers and fans a quality product. a. Vince McMahon, founder of WWE, infamously launched a professional football league
(the XFL) in 2001 with grandiose plans of competing with the NFL. In its initial stages, thanks to a very successful marketing campaign, the league enjoyed outstanding ticket sales, sponsorship sales and television ratings. Fans, however, quickly discovered the product on the field was severely lacking, and the league was forced to close its doors after just one very lackluster season. i. “Those initial (TV) ratings tell you they had superior promotion,” said Stephen
Greyser, a Harvard Business School professor who co-authored a Harvard Business Review study on the XFL and still highlights the XFL as a case study in his Business of Sports course in an interview with the Sports Business Journal. “They just did not put as much emphasis on building the product as they did on building the hype.” 38
b. After a controversial call made by a replacement referee on Monday Night Football, Green Bay Packers shareholder David Goodfriend called on the Federal Trade Commission to investigate whether the National Football League’s “deceptive” use of replacement referees has violated “consumer protection statutes.” The NFL signed an agreement soon after for the regular officials to return to the sidelines. 39
i. Click here to read the entire letterc. Feeling that “flopping” (when a player tries to deceive the referee into making an
incorrect call) was detrimental to its product as a whole, the NBA implemented a system for the 2012-13 that would fine players for any play the league deemed to be a flop
d. In 2014, an Independent baseball league adjusted league rules in an effort to speed up the length of game times, including requiring managers to substitute runners from the bench anytime catchers get on basei. Click here to read about some of the other rule changes made by the Atlantic
League
e. Research published by an assistant professor at Harvard Business School recently suggested that “When a school goes from being mediocre to being great on the football field, applications increase by 18.7 percent. To attain similar effects, a school has to either decrease its tuition by 3.8 percent or increase the quality of its education by recruiting higher-quality faculty who are paid five percent more in the academic labor market.” 40
f. The success of the US Women’s Soccer team at the 2011 World Cup led to a sharp increase in interest in following and supporting the product i. Twitter announced that at one point during the championship game, a tweet record
had been broken: The game had led to 7,196 tweets per second. By contrast, the Green Bay Packers’ Super Bowl victory over Pittsburgh led to a high of 4,064 per second while news of Osama bin Laden’s death hit 5,106.41
ii. From June 26 to July 17, Women’s World Cup content across ESPN.com, ESPNsoccernet and espnW.com generated 16 million page views and 12 million visits 42
iii. The championship game was ESPN’s most-viewed and highest-rated soccer match in the broadcast company’s history with an average of 13.5 million viewers and was also the second most-watched daytime telecast in cable television history 43
iv. The popularity boom led to the launch of a new women’s professional soccer league in 2013, the National Women’s Soccer League(a) In 2014, the league continues to thrive, even adding an expansion team to the
league in Houston (the Dash)(i) According to Chris Canetti, president of the Houston Dynamo and Houston
Dash via an ESPNW story at the start of their inaugural season: "We are not quite to my goal for season tickets yet, but are doing well. We have nearly 3,000 season tickets in only four months of existence. To put that in perspective, it is more than the Dynamo had in its inaugural season in 2006. That number has grown to nearly 12,000 today."
E. Impact of Technology1. Advancements in technology have led to new product innovations and forced an evolution
in the way sports and entertainment marketers work to reach consumers a. MP3 technology
i. A podcast is a digital media file (could be audio or video), or a series of such files, that is distributed over the Internet using syndication feeds for playback on portable media players and personal computers 44
(a) The NHL’s league website (nhl.com) features a podcast page which includes podcasts of its NHL radio show (“This Week in the NHL”) and podcasts for individual teams in both audio and video format (the Minnesota Wild podcast show is referred to as the “pondcast”, St. Louis Blues have a “BluesCast”, Washington Capitals have a “Caps Report” etc.) 45
(b) Podcast technology opened the door for comedian Adam Corolla to reinvent and revive his career after his network show was cancelled. Since launching his self-produced podcast show, "The Carolla Podcast" is frequently been the most popular podcast on iTunes, even edging out President Obama’s weekly address and drawing over 3 million downloads in a given week 46
(c) In an effort to continue building on the success of its ’30 for 30’ series, ESPN announced in 2012 that they’d be augmenting future films with podcasts featuring popular sports personality Bill Simmons
b. Streaming audio and video capabilitiesi. Online sports talk “radio” (ESPN Radio)ii. Streaming audio (Pandora, Spotify etc.)iii. Websites offering short films, video clips and movie trailers (Hulu)iv. Sirius XM satellite radio v. Online video rentals (Netflix, Blockbuster etc.)vi. Streaming live video events
(a) In 2015, many major global sporting events like Winter X Games 18 in Aspen, Masters Golf Tournament, British Open Golf Tournament, Super Bowl XLIX, Wimbledon and NCAA Tournament will be streamed through the Internet allowing fans to watch online and/or on mobile devices
(b) A report in Business Week suggested that adding live sports broadcasts “may help YouTube expand revenue by keeping viewers on its site longer to woo more advertisers. YouTube’s contract to show cricket from the Indian Premier League, which gives the Google unit a share of ad revenue from games and the league’s website, brought in 55 million visits from more than 250 countries.” 47
(c) The NFL streamed the Super Bowl for the first time in 2012, offering a live broadcast of the game on NBC Sports’ website and to Verizon wireless mobile devices (over 2 million fans watched the NBCSports.com stream) (i) The Fox Sports Go “preview” service delivered the Super Bowl stream to
an average audience of 528,000 viewers per minute in 2014 according to variety.com, a 4% increase over the 2013 Super Bowl stream on CBSSports.com and up 52% from NBCSports.com’s streaming coverage in 2012
(d) ESPN, already a leader in streaming live sports, plans to take things even further by making more content available to consumers on mobile devices through the WatchESPN app (i) Digital consumption of ESPN has grown at a rapid pace, illustrated by the
strong viewership of the 2014 World Cup when usage of the WatchESPN app on smartphones and tablets averaged nearly 1 million viewers per match, an increase of 174% from the 2010 World Cup 48
(e) Thanks to a daily two-channel live webcast straight from the festival, you didn't have to actually be out in the fields of Manchester, Tennessee to catch all the bands playing at 2014 Bonnaroo
c. Emerging “interactive” technologies i. Shazam (a mobile phone app that helps users identify music) partnered with
American Idol in, allowing viewers to identify what songs contestants were performing, click links to buy the songs, get Twitter feeds from insiders, follow the official social media channels, and see video and photos from AmericanIdol.com. Shazam’s “audio tagging” technology was also featured during broadcasts of the Super Bowl, Grammy Awards & Olympic Games.(a) According to Shazam, its Super Bowl audio tagging led to "record engagement,"
with football fans tagging content millions of times during the game, the half-time show 49
(b) According to Adweek.com, Shazam and SoundHound partnered with cinema ad networks National CineMedia and Screenvision, allowing movie advertisers to tie audio-recognition features into preshow promotions on consumer mobile devices
ii. At FanFest during Major League Baseball’s All-Star weekend, a FanZone touch-screen station was on-site, allowing fans to create and purchase customized name and number all-star jerseys 50 (a) Click here to see similar technology from FanZone in Winnipeg at the MTC
iii. The Rolling Stones broadcast their final concert of 2012 through a live stream to PC, smartphones and tablets for a digital ticket price of $39.95. The stream included interactive features like pause, rewind, live Twitter feeds and the ability to replay the concert as many times as fans wanted for up to 30 days after the show.
(a) Via USA Today: "Fans have gravitated to interactive sports on digital. There's the same opportunity for live concerts," says Chris Wagner, executive vice president of NeuLion, which designs and delivers digital content for numerous clients including the National Football League, NBA, NHL and UFC.
iv. Gatorade recently launched “League of Captains” comic book campaign starring NFL stars Peyton & Eli Manning, JJ Watt, Cam Newton and Robert Griffin III which engages fans by encouraging visits to their website where fans can create their own superhero athletes, even offering the ability to choose from multiple sports, hair styles, jerseys, shoe colors and other attributes.
d. E-Commerce i. E-Commerce refers to the consumer’s ability to purchase goods and services
(sports and entertainment related or otherwise) online on the Internet(a) Compact discs, DVDs, Bluray and other forms of music and video(b) Individual songs, shows and movies in digital format(c) Subscriptions to listen to Major League Baseball games live(d) Tickets to events(e) Online video games and in-game purchases
(i) Electronic Arts (EA) reportedly earns $110 million each year from microtransactions such as acquiring new players in their FIFA soccer game franchise 51
(f) Customized jerseys from NFLshop.come. Advertising
i. Signage and displays(a) American Airlines Arena unveiled new technology capable of delivering “live and
dynamic billboard advertising”, making the NBA’s Miami Heat the first U.S. sports franchise to tap into the next generation of outdoor media systems designed to drive revenue 52
(b) The Kansas City Royals teamed up with Cisco Systems and AT&T Inc. to launch a new video platform that offers customized advertising, capable of delivering live game video, concessions menus and customized fan content 53
(i) “Technology enables us to enrich the experience for our fans, who are celebrating 40 years of Royals baseball this year,” said Kevin Uhlich, Royals senior vice president of business operations 54
(c) Advertising firm “Instadium.com” sells promotional materials and “touchpoints” to advertisers at venues such as Coors field in Denver. They have ads positioned in hundreds of locations around the stadium, from rotational signage around the field perimeter to ads in the restrooms, concessions areas, and concourses. Fans can’t help but be exposed to their messages.
ii. “Virtual advertising” (a) In recent years, NHL organizations have turned to virtual advertising to generate
incremental revenues from their television broadcasts. Eight NHL clubs have sold digital inventory on the glass behind the net, a prime asset with terrific on-camera visibility. On average, teams can reportedly generate $500,000+ from virtual ads on the glass, an inventory piece that costs just $2,700 per game ($113,400/year) in production costs from Sportsvision. While virtual advertising has been widely adopted in the sports marketplace for the past ten years, notably with behind-the-plate signage in baseball, it is gradually becoming utilized in hockey. 55
iii. Interactive “shopping” experiences (a) One trend in the sports and entertainment marketing world is the implementation
of strategies that utilize QR codes (a barcode that can be scanned by camera-enabled mobile devices that direct consumers to various digital content like web pages, or other phone functions like email and text messaging)(i) The Detroit Red Wings feature specific QR codes in their game day
program, allowing ticket holders to find more information, watch videos, or buy related merchandise—all without leaving their seat. To ensure that fans took full advantage of the technology, the Red Wings broadcast a how-to instructional video during timeouts on the Joe Louis Arena jumbotron.56
(ii) KEEN footwear placed QR codes on print advertisements featured in Backpacker magazine that delivered content to consumers ranging from exercise videos to their online store
(iii) Sochi marked the 500 day countdown to the start of the 2014 Winter Olympics by releasing an innovative stamp which included a QR-code
(b) In 2013, a cricket team in India (the Royal Challengers Bangalore) introduced interactive tickets where fans of the Indian Premier League team can access highlights, get live traffic updates from areas surrounding the stadium, parking information and a call-a-cab tool. Other features include a 3D stadium view, team store and video highlights.
(c) Perhaps best described as a “futuristic digital shopping experience”, Adidas launched an interactive “wall” at select retail stores providing consumers with an opportunity to spin, twist, turn and enlarge computer representations of the footwear, learn more about individual products or even order through a touchscreen. The technology also allows Adidas to watch shoppers as they interact with the wall’s features.(i) For more details about the adidas interactive wall, click here.
(d) In 2013, Nike also implemented a strategy for selling product through virtual reality by taking advantage of hologram technology
f. Audio / Visual Enhancementi. High Definition broadcasts
(a) In a sentiment shared by many sports consumers, popular ESPN writer Bill Simmons discusses how HD television has revolutionized the fan (viewer’s) experience: “It's a new world for sports fans: an intimacy that can't be found otherwise, unless you're paying through the nose for great seats. I thought I'd like sports less when I got older. Actually, I like them more. And it's partly because of HD. I'm constantly saying to myself, I can't get over how great that looks!” 57
(b) Over 1,000 FM radio stations are now broadcasting in high definition (special HD-ready receivers are required to hear the high quality signal) 58
(c) 4K, or Ultra HD, televisions have been deemed as the future of the high definition viewing experience 59
(i) Samsung has announced a "Soccer Mode" feature for its 2014 lineup of 4k sets, which the company describes as "deliver(ing) crisper picture quality to ensure the viewer experiences a greener shade of grass, more lifelike details of the players, and vivid sound that makes people at home feel as if they are actually at the stadium." 60
g. Video gamesi. Games now feature enhanced graphics, creating a more realistic user experience
while game players now enjoy greater accessibility and interactive capabilities through the Internet
ii. Today’s video game enthusiasts enjoy motion sensor technology, allowing for users to simulate various activities (ranging from simple movement like running and jumping to sports activities like bowling or tennis) with (Wii and PlayStation Move) or without (Microsoft Kinect) a video game controller
iii. Video game technology continues to rapidly improve at a rapid pace (a) The popular ‘Madden’ franchise now offers enhanced features like voice control
and a virtual twitter feed (b) Video game technology developed by Electronic Arts used in its Tiger Woods
Golf franchise is now being used to improve the game of real golfersh. Apparel/Footwear/Sporting Goods
i. Columbia Sportswear introduced its line of Omni-Heat Thermal Electric apparel (including electrically heated jackets, a line of heated boots and a $400 pair of electrically heated gloves) targeting active outdoors activists such as winter sports enthusiasts and those who enjoy hunting and fishing
ii. Adidas made a splash in the running marketplace in 2013 with the release of its Springblade, the first running shoe with individually tuned blades engineered to propel runners forward with one of the most effective energy returns in the industry
iii. In 2012, Nike introduced its “Flyknit” lightweight shoe (described as “newly-designed Flywire technology to loosen and tighten with the natural motion of the feet that features a snug fit that fits like a sock”) while Under Armour also launched a lightweight “Spine RPM” running shoe (described as “a shoe designed to function much like the human spine — agile when it needs to be but rigid when it must be”) (a) Click here for a video discussing the technology behind Nike’s flyknit technology(b) Click here for a video discussing the technology behind Under Armour’s spine
technology iv. Runners in the New York Marathon have MapMyRun technology available to them,
allowing friends and family to track their progress in real-time, including status updates for each participating runner automatically posted to Facebook and Twitter accounts as runners pass pre-determined mile markers 61
v. Expanding on the success of their Nike+ technology, the shoe giant unveiled a new product (Hyper Dunks) in 2012 that features a pressure sensor, allowing athletes to measure such physical attributes as speed and jumping ability while tracking movement recording activity. The company also released the Fuel Band, a wristband device that measures and records a users’ everyday activity, calories burned and other useful information.
vi. Under Armour is developing a shirt that will feature technology that can track your heart rate, breathing and even your G-force as you work out using specially designed sensors that pick up electrical signals from your heart (the product is tentatively scheduled for release sometime in 2013) 62
(a) To read more about Under Armour and its commitment to innovation and technology, click here.
(b) Click here to read about Under Armour’s plans for an interactive running suitvii. Inspired by dimples on a golf ball (which reduce aerodynamic drag), Nike released
its “TurboSpeed” track suit in time for the 2012 Olympic Games, claiming the technology could shave up to 0.023 seconds off 100-meter sprint times — a difference that could have elevated Walter Dix from a bronze to the silver medal at the Beijing Olympics. The uniform’s efficiency was tested during hundreds of hours in a wind tunnel over a twelve year period and they are eco-friendly, made from 82 percent recycled materials.63 (a) Click here for a video discussing the technology behind Nike’s TurboSpeed
viii. In 2014, New Balance announced plans to utilize 3D printing technology to customize high performance products for athletes
ix. Complex.com compiled a list of their rankings for the top 25 greatest sneaker innovations of all time. Click here to see the slideshow.
i. Broadcasting / Viewer Experience and accessibility to programming i. DirecTV offers its NFL Sunday Ticket subscribers access to the “NFL Game Mix”,
an exclusive channel that displays up to eight games at once in real time, allowing viewers to select games with a peak in the action for which to tune in to
ii. ESPN’s “Goal Line” channel features unlimited live cut-ins and highlights from numerous top college football games during each Saturday of the college football season, plus up-to-the-minute commentary from ESPN analysts and experts 64
iii. Today’s viewing experience offers more flexibility to consumers when providers offer content on a number of devices, like Augusta National Golf Club’s “multi-platform coverage” of the 2013 Masters Golf Tournament (which included traditional television coverage on ESPN and CBS, several live video channels on the Masters Web site, multiple free apps for both smartphones and tablets, and Golf Channel's on-air coverage that featured over 60 hours of live programming)(a) Said Chairman Billy Payne via press release, "Each year, our goal is to deliver
meaningful content in a significant way. Fans of the Masters can experience the history, tradition and competition of the tournament in any manner they wish to receive it." 65
iv. With the re-emergence of 3D technology (3D has been around since silent films in the early 20th century), the viewing experience has been taken to a whole new level(a) CBS was a pioneer in utilizing 3D technology when they beamed the 2010
NCAA basketball championship game in 3D to 100 movie theaters across the U.S. In 2012, live public screenings of the Wimbledon finals were shown in 3D in Europe, North America, Africa, Latin America and Asia while BBC, a British broadcasting company, provided 3D coverage of several Olympic events to fans in London.
(b) While 3D has created excitement among consumers, film studios have successfully cashed in on the craze by increasing revenue as they have been able to raise ticket prices up to 35% for films presented in 3D (i) Ticket prices in the U.S. hit an all-time high in 2011, according to the
National Association of Theatre Owners, rising to an average of $7.93 per ticket from $7.89 from the previous year 66
(ii) The 2012 summer blockbuster The Avengers shattered opening weekend records (grossing $200.3 million in box office sales) thanks in part to the fact that 52 percent of those who watched the film chose to purchase higher priced tickets to see the movie in 3D 67
(c) However, despite the increase in availability of 3D ready equipment, the technology has not caught on as quickly as many industry insiders anticipated (i) In 2012, DirectTV dramatically cut back on the number of hours it airs 3D
programs, citing lack of content as the reason while AT&T’s U-verse entirely eliminated its 3D lineup because of low customer demand 68
(ii) In 2013, ESPN announced that it would be dropping its 3D channel by the year 2014, citing a lack in viewership
(d) Like anything else, broadcasting technology will continue to evolve. Many sports executives are already investigating the possibilities of Google’s “glass” project (ability to stream video from the athlete or performer’s perspective through a pair of technologically advanced glasses) and the impact it could have on the overall viewing experience(i) Click here to see a video clip of Indiana Pacers’ 7 foot star Roy Hibbert
(e) The next wave in improved broadcast technology includes curved TVs and 4k technology (which ESPN is focusing on now in place of the 3D)
j. Augmented realityi. Augmented reality (AR) is essentially the practice of taking the same graphics used
on television screens or computer displays and integrating them into real-world environments
ii. Currently, it is one of the hottest trends in the sports and entertainment marketing world as companies experiment with ways to utilize augmented reality to immerse fans in a more realistic entertainment experience and many industry insiders believe augmented reality will be a “game-changer” when it comes to connecting fans with their favorite sports and entertainment brands
iii. An augmented reality campaign led to significant buzz at the 2014 Billboard Music Awards when a hologram of Michael Jackson performed a previously unreleased song ("Slave to the Rhythm") on stage(a) Click here to see video of the performance
iv. Coca Cola offered a unique augmented reality experience in Brazil at the 2014 FIFA World Cup when fans were able to get photographed grabbing a coke bottle and a screen displayed an image that looked like they were holding the tournament’s championship trophy (fans then had the option to share the photograph through various social media platforms)
Lesson 2.6Competition for the Entertainment Dollar
A. Discretionary Income1. Discretionary income is money left to spend after necessary expenses are paid 69
2. There is only so much discretionary income available in today’s economya. The competition for entertainment dollar increases when the economy is in a recession
i. The results of a Fortune poll released in May of 2009 showed discretionary spending in America to be at a thirty year low 70
b. Regardless of economic conditions, the role of the sports and entertainment marketer is to find ways for consumers to spend those dollars with their organization
3. Competition for the entertainment dollar is always on the rise with new, innovative ways to entertain constantly being introduced to the market
4. What types of entertainment are offered in your area?a. Sporting eventsb. Live music and entertainmentc. Video gamesd. Theatree. Festivals and eventsf. Movie rentalsg. Theme parksh. Movie theatersi. Excursions (hiking, rafting, etc.)
B. Consider the many entertainment options available to residents in the Denver Metro Area 1. Sports (professional and major colleges) and activities
a. Denver Broncos (NFL)b. Denver Nuggets (NBA)c. Colorado Avalanche (NHL)d. Colorado Rockies (MLB)e. Colorado Crush (Arena Football League)f. Colorado Rapids (Major League Soccer)g. Colorado Springs SkySox (Minor League Baseball)h. Colorado Mammoth (National Lacrosse League)i. University of Colorado Buffaloes (NCAA)j. Colorado State University Rams (NCAA)k. University of Denver Pioneers (NCAA)l. Air Force Falcons (NCAA)m. The International Golf Tournament (PGA Tour)n. Bandimere Speedway (National Hot Rod Association Championship Drag Racing)o. Grand Prix of Denver (Auto racing)p. Dew Action Sport Tour (Action sports)q. Mountain climbing/hiking/camping
2. Entertainmenta. Theme and entertainment parks
i. Six Flags ii. Water Worldiii. Lakeside Amusement Park
b. Moviesi. Movie theatersii. Blockbuster video; Redboxiii. Drive in
d. Venuesi. Pepsi Center ii. Invesco Field iii. Coors Field
e. Performing Arts/Theatrei. Boulder's Dinner Theatreii. Colorado Balletiii. Colorado Children's Choraleiv. Comedy Works, Inc.v. Denver Center for the Performing Arts
f. Festivalsi. The Denver Mariachi Festivalii. Colorado Music Festivaliii. Bravo! Vail Valley Music Festivaliv. Cherry Creek Arts Festivalv. Colorado Renaissance Festival
g. Museums/Art/Culturei. Astor House Museumii. Black American West Museum & Heritage Centeriii. Buffalo Bill's Museum & Graveiv. Cherokee Ranch and Castlev. Children's Museum of Denvervi. Colorado Sports Hall of Fame
h. Zoos/Aquariums/Gardensi. Downtown Aquariumii. The Denver Zooiii. Butterfly Pavilion and Insect Centeriv. Denver Botanic Gardens
i. Specialty Tours/Attractionsi. Cave of The Windsii. Cripple Creek & Victor Narrow Gauge Railroadiii. Dinosaur Ridgeiv. United States Mint
1. A classic sports marketing book entitled “The Elusive Fan” was published to examine the volatility of the sports/entertainment marketplace and the challenges today’s sports business professionals facea. Excerpt from the book: “It’s an October Saturday in Chicago. On television are two
MLB playoff games, two preseason NBA games, fourteen college football games, five golf tournaments, an AHL game, an international horse race, two NASCAR races, and eight soccer matches. The University of Illinois and Northern Illinois University football teams and the AHL’s Chicago Wolves have home games. Hawthorne Race Course has a full card and there’s harness racing at Balmoral Park. There are twenty-nine high school football games and the final round of the boys and girls Illinois high school state championship golf tournaments. Youth and recreational league games are also being played in every community of the Chicago area. What about the Chicago Bulls, Bears, Blackhawks and Northwestern Wildcats? The Bulls played at home last night, the Bears play at home tomorrow, the Blackhawks are away and the Wildcats had their midseason bye. Of course this does not include the hundreds of satellite television channels broadcasting soccer, rugby or cricket games all over the world; the millions of sports Web sites with fantasy games, insider information and gamecasts; and a wide variety of increasingly realistic sports video games.” 71
b. The primary challenge for today’s sports/entertainment business professional is capturing consumer interest and building loyalty once that connection has been madei. Why is loyalty important? Most marketers follow the widely accepted “20/80 rule”:
20% of customers account for 80% of company sales(a) Fans of the Lord of the Rings trilogy will see The Hobbit in theaters whether or
not the film receives positive reviews (many fans from around the world actually camped out for in costume for the movie’s premiere in New Zealand)
ii. An excerpt from a Forbes article on NHL fan loyalty suggests that “From a marketing perspective, loyalty – because it’s a leading-indicator of positive consumer behavior correlating, highly with viewership, licensed merchandise sales and, to a more-or-lesser, degree, attendance – represents the ultimate trophy a sports marketer can win.”
(a) According to the study referenced in the Forbes story, here are the most and least loyal fans in the NHL:(i) MOST loyal NHL fans
1. Chicago Blackhawks 2. New York Rangers 3. Boston Bruins 4. San Jose Sharks 5. St. Louis Blues
(ii) Least loyal NHL fans (#1 being the least loyal)1. New York Islanders2. Columbus Blue Jackets3. Phoenix Coyotes4. Winnipeg Jets5. Buffalo Sabres
(b) Because NASCAR fans are among the most brand loyal in all of sports, more Fortune 500 companies invest in NASCAR marketing programs than any other major sports property 72
(i) According to Steve Phelps, chief marketing officer for NASCAR: “We have the most brand loyal fans in all of sports. More than three out of five avid NASCAR fans agree that even in tough economic times, they will continue to support NASCAR sponsors over other brands.”
iii. Because loyalty is so important, many sports and entertainment organizations implement “loyalty programs” to reward core customers
(a) In 2014, the New York Jets introduced a new loyalty rewards program for their season-ticket holders, giving away items and experiences in exchange for points earned in several different ways: from attending games to causing opponents’ false starts (click here for more details of the Jets rewards program) 73
(b) Hoping to create more brand loyalty among consumers, Sports Authority (a sporting goods retailer) launched a rewards program. Named “The League”, the program provides members with benefits like cash back on purchases, member-only in-store events and a birthday reward. 74
c. New and emerging sports and entertainment offerings keep the marketplace in a constant state of competition and evolutioni. Nike recently announced that its action sports division is the fastest growing
category within the Nike Brand. The Company anticipates doubling its current estimated $390 million business by 2015. 75
(a) Nike’s global marketing director for action sports addressed the launch of the ad campaign targeting the action sports consumer: "We want to connect with a younger consumer and a larger community of action sports.” 76
ii. Many industry analysts are beginning to ponder the growth potential of cricket in the U.S.
(a) The American College Cricket Championship began in 2009 with just five participating colleges but has grown quickly to include nearly 70 affiliated colleges 77
(b) Joe Favorito, a long time and well respected industry expert, put it this way in a 2011 blog post: “On April 2 it generated 45 percent of all page views on ESPN’s mobile platform, and over a million views in the United States alone. Its final was watched not by millions, but by billions around the world, and its professional league, which started just days after its international final, saw sellout crowds, waves of blonde haired cheerleaders and loud music. It is also the subject of one of the most talked-about documentaries of the upcoming Tribeca Film festival. No it’s not football or baseball, or NASCAR or even soccer or the X games. And it’s not Charlie Sheen. It is cricket, and while it is still not registering in mainstream America or with the media, it is becoming a bigger player on the global sports landscape than ever before. Should we care in North America? The numbers say yes we should.” 78
iii. ESPN’s action sports X Games franchise’s consumer products and licensing business does more than $120 million in retail sales each year 79
iv. In a sport once publicly denounced by Senator and former Presidential Candidate John McCain, Mixed Martial Arts (MMA) has gained mainstream appeal 80
(a) The sport is now sanctioned in every state with an athletic commission except New York (which Dana White, President of the UFC is still working on)
(b) UFC's pay-per-view audience surpassed boxing and World Wrestling Entertainment for the first time in 2006, and has been on top ever since
(c) UFC events are now being broadcast to a half billion homes worldwide, but Dana White, recently stated that he is working on deals that would double that number in the near future 81
v. Participation in the sport of lacrosse grew by more than 5.5 percent in 2012 according to the annual participation survey conducted by US Lacrosse, released in 2013. The US Lacrosse report found over 722,000 players competed on organized teams in 2012. By comparison, US Lacrosse first began tracking overall
lacrosse participation in 2001, when just 253,931 people played on organized teams.82
B. Examining the Elusive Fan 1. Many factors impact a consumer’s decision to participate in sports and entertainment
a. Primary influencers are money and timeb. Other factors can include personal issues like spending time with family, camaraderie
among friends and relaxation2. Innovation, enhancement of the overall fan (consumer) experience and careful market
research become essential components of marketing plans and strategies3. According to the book, an elusive fan is defined by seven major characteristics: 71
a. Pressurized competitive environmenti. The sports marketplace is extremely crowdedii. Paintball, while not a direct competitor of the NHL, poses an indirect threat as the
sport gains popularity and has the potential to attract new sports fansb. Higher fan expectations
i. Fans demand a higher consumer experience than ever before with more concessions options, newer facilities and advances in broadcast technologies
c. Paradox of commercialismi. A conflict between business and game exists as the business of sports grows while
fans still crave the spirit of competition and integrity of the game(a) In 2012, Indianapolis Motor Speedway featured signage on the racing surface
for the Indy 500 for the first time in its history. Said a spokesperson familiar with the event, “That's the tricky part of operating an iconic sports venue, such as the Indianapolis Motor Speedway, Fenway Park, Wrigley Field. That's the balancing act. How do you maintain the integrity of the facility but at the same time be able to compete in this new world of sponsorship sales where [marketing] revenue is important to help us [keep] down ticket prices and get brands involved that will activate to help us build the overall brand of the Indianapolis 500.” 83
(b) New NBA commissioner Adam Silver told Adage.com in 2014 that the sale of advertisements on NBA jerseys is “inevitable”, citing a higher level of acceptance by U.S. consumers as they are exposed to more and more jersey sponsorships. Two years ago, an estimate said advertising on jerseys could bring in an additional $100 million in league revenue.
ii. Many sports marketing executives wrestle with the decision as to whether they should sell the rights to advertise on the front of their jerseys
(a) Two years ago the WNBA announced a partnership with Boost Mobile that will place ads on the uniforms of 10 of the league’s 12 teams, with the Boost corporate logo appearing on uniform fronts directly below the players’ numbers84
(b) Major League Soccer’s Philadelphia Union announced the controversial decision to sell the jersey sponsorship rights to Bimbo (correctly pronounced Beem-bo), the world's largest bakery, in a four year, $12 million deal 85
(c) While the debut continues, sports teams who choose NOT to sell jersey advertising are passing up the potential for extremely lucrative sponsorship deals (i) Several years ago, Horizon Media estimated that by refusing to let brands
place advertisements on team uniforms, North America’s big four sports leagues (NFL, MLB, NBA, NHL) were missing out on $370 million per year 86
(ii) Click here to read an excellent article published in 2014 weighing in on the debate
To see the top English Premier League top jersey sponsorship deals, have students review the lesson 2.7 student handout marked “Lesson 2.7 student handout – top jersey deals”. The file can be accessed from your CD-ROM or online.
iii. As it becomes more and more challenging to generate a profit in professional sports, many organizations look for new and creative ways to generate advertising dollars
(a) The Florida Panthers announced they would convert every seat in the BankAtlantic Center’s lower bowl to the color red in conjunction with the team’s “We See Red” marketing campaign and that the logo for one of their sponsor’s (Zimmerman Advertising) would appear on the front of each seat (a deal that will reportedly generate revenue in the mid-six figures each year for the team) 87
(b) In 2012, the NFL relaxed its long standing policy of not allowing teams to solicit advertising dollars from any gambling entity when they approved the Baltimore Ravens’ effort to open conversations with casinos about signage, radio advertising and ads in game programs 88
(c) Click here to see a video criticizing Major League Baseball’s decision to allow virtual advertising during broadcasts
d. New technologyi. Never before have consumers had so much information or access to sports and
entertainment products at their fingertips with the proliferation of media channels ii. The fan experience is being consistently upgraded as a direct result of new
technologies and advances in social media as consumers can absorb the sport experience from almost anywhere
(a) Devices like the Slingbox or mobile devices and tablets enable users to watch live sports or television programming remotely
(b) 2013 marked the first time that more than half of avid sports fans who use social media to follow sports also do so while watching their favorite team’s games, according to the 2013 Sports Fan Engagement Study conducted by Catalyst on behalf of SportsBusiness Journal. 89
e. Individualismi. Society as a whole has become less focused on group interaction and developed
more specialized interestsii. Individualism has slowly resulted in the deterioration of the popularity of team
sports(a) The fastest growing sports in America and internationally are individual sports(b) Pickleball, a sport that could be described as a tennis-badminton-ping-pong
hybrid that was invented more than fifty years ago, is the fastest growing sport in North America and has been for the last four years 90
(c) The Outdoor Industry Association reported that 10.5 million Americans rode stand up paddleboards in 2011 (also one of the fastest growing sports in the world), about 60 percent of the number of whitewater kayakers. Leisure Trends Group reported a 104 percent increase in U. S. stand-up paddle board sales from April 2011 to April 2012, and another 90 percent by April 2013 (according to the Denver Post, even fishermen are supporting the trend). 91
f. Change in family structure/behaviori. Today, more than half of all U.S. families are divorced, single parent or diverse
groups of unrelated people 92
ii. As a result, the decision making process for sports and entertainment participation becomes more complicated
g. Time pressurei. The time demands Americans face today offer fewer hours for the consumption of
sport in any capacity, be it as a spectator or participantii. It is not simply the activity itself that poses challenges for consumers
(a) Consider the plight of a sports fan that purchased tickets to see a Dallas Cowboys game. Kick-off is at 7:00 p.m. and the fan leaves work at 5:00 to meet a friend at a local restaurant for a pre-game dinner. Given traffic and parking issues, that fan may not get home until 11:30 p.m. That two or three hour game has now eaten up nearly six hours of the consumer’s day.
Lesson 2.8Introduction to Event Marketing & ManagementA. Event marketing
1. Event marketinga. Event marketing refers to the actual marketing and management of an event by its
organizersb. Event examples
i. Tour de Franceii. Competitive Eating Eventsiii. Cannes International Film Festivaliv. US Air Guitar Championships v. America's Cupvi. ESPY Awards
(a) To encourage celebrities to attend events like the ESPYs, event marketers often provide gift bags for guests or sponsors
(b) The gift bags given to guests at the 2014 ESPY awards carried an estimated value of $23,000 included vacation packages, gym memberships, gift cards, spa gift certificates, sailing lessons, golf club memberships, a coffee maker and a showerhead with a built in speaker 93
(i) Click here to view the entire list of products featured in the gift bagsc. Event marketing has become a profitable segment of the sports/entertainment industry
while creating a positive economic impact for the areas that host events i. Media Business Report estimated that marketers spent an estimated $38 billion on
event marketing in 2012 (up from $9 billion spent in 2009) while, according to a study from the Columbia Business School and New York American Marketing Association (NYAMA), 90% of US marketers say they include sponsorships and events as one of their marketing tactics 94
ii. Russia is betting big on the 2014 Winter Games in Sochi as costs are expected to exceed $50 billion, according to Russia's international news agency RIA Novosti. That would make it the most expensive games, summer or winter, ever staged. By comparison, the 2010 Winter Olympics in Vancouver, Canada, cost $3.6 billion, according to an estimate by PricewaterhouseCoopers, though others put the bill closer to $6 billion. 95
iii. In 2012, WrestleMania 28 broke the attendance record at Sun Life Stadium in Miami where 78,363 fans watched a battle between popular wrestlers The Rock and John Cena, generating $8.9 million in sales 96
iv. The organizers of Montreal’s International Jazz Festival operate on a hefty $30 million budget 97
v. Since opening in downtown Washington, D.C. 15 years ago, the Verizon Center arena has hosted nearly 3,000 different events and attracted over 34 million fans 98
d. For sports and entertainment events, event marketing can involve a number of different marketing activitiesi. Marketing the event to athletes or entertainers/celebrities to recruit and secure their
participation to elevate the attractiveness of the event as a wholeii. Creating a publicity strategy incorporating a plan to utilize the media to increase
coverage of the eventiii. Promoting the event to the general public to increase attendance or follow the event
through the mediaiv. Marketing the event to corporations to urge sponsorship and general event support
v. Working with government officials to provide public supportvi. Marketing to private vendors that can provide services for the event
2. Corporate support of eventsa. The role of corporate support in event marketing has increased dramatically in the past
few decades. Without sponsorships and corporate support, many events would not only fail to generate a profit, some would cease to exist.i. The ADT Championship, once one of the LPGA's most prestigious events, was
eventually canceled because the event sponsor, Stanford Financial, had financial trouble and the event was unable to secure a new sponsor in their place. 99
ii. The 2014 Winter Games in Sochi had already inked over $1 billion in sponsorship revenue by 2010, four years before the games would even take place 100
b. To entice corporate support, event marketers must integrate the “5 P’s of Event Marketing” to their strategy to help sponsors achieve the results they are looking for as an event sponsor or partner
3. The 5 P’s of event marketing 101
a. Participation i. Involves getting consumers to attend the event and interact with the company,
whether visually, verbally or interactivelyb. Product/brand experience
i. Refers to the activity of distributing samples or having the consumer try on or try out your product at the event
c. Promotion i. Focuses on the generation of media exposure by creating stories within the event
and further increasing corporate awareness through promotions that might include event-related coupons and sweepstakes
d. Probei. Conduct research before, during and after the event to make sure that you are
effectively reaching and penetrating your target audiencee. Prospect
i. Implies that companies should approach event marketing as a long-term commitment
ii. Involvement with an event can require several years to establish before a company will reap the reward on their investment
B. The event triangle 102
1. The event triangle is the model for studying the exchanges developed in sports marketinga. It places emphasis on the relationships between producers and consumers
2. Three key components of the triangle a. Event
i. A function that will draw participants, spectators and sponsorsii. Could be amateur or professionaliii. Typically offers entertainment for spectatorsiv. Provides exposure for sponsorsv. More event examples
(a) Super Bowl(b) FIFA World Cup(c) High school state tournaments(d) Local charity golf tournament(e) Local blues or other music festivals
vi. With so many events being offered, event organizers often find creative new venues to host events in an effort to generate public interest(a) Red Bull launched its “King of the Rock” one-on-one basketball tournament to
Alcatraz and the first time basketball has been played on the hard concrete of “The Rock” since the inmates left the island more than 50 years ago) 103
(b) In 2011, the NCAA hosted the first-ever college basketball game on an aircraft carrier to celebrate Veterans Day (the vessel was the USS Carl Vinson, the same ship that the body of Osama bin Laden was brought to in order to be buried in the North Arabian Sea). However, two basketball games on aircraft carriers in 2012 were cancelled because of dangerous court conditions and it was announced in 2013 that games will no longer be scheduled aboard ships as a result.104
(c) Events like Tough Mudder, Spartan Race and Warrior Dash have drawn millions of participants over the last decade as obstacle course racing has boomed in popularity(i) A Chicago obstacle racing company reportedly expanded their profits from
$50 thousand to $50 million in just four years(ii) A Boston Globe story reported that there were 1.5 million US participants in
just the three largest obstacle companies in 2012: Tough Mudder (the largest), Spartan Race, and Warrior Dash while Tough Mudder revenues jumped from $2 million in 2010 to a projected $115 million-plus for 2013 through 53 scheduled events in the US, Canada, Great Britain, Australia, and Germany.
(d) Based on the success of past shorter races (5k and 10k), many other unique racing events are now popping up, from the “Slime Run” and “Bacon Chase” to a holiday lights race event
b. Sponsori. Opportunities for companies to utilize events as a means for communicating a
message to consumers, often times to large groups of consumersii. Utilize the event to market its products or servicesiii. Leverage its relationship to advance future business opportunities
c. Spectatorsi. Those attending the event as a source of entertainmentii. Typically must pay to attend the event
3. Exposed to promotions for the event and event sponsorsC. Event management
1. While the primary focus of event marketing is to attract all three components of the event triangle (event, sponsor, spectators), the primary function of event management is to ensure the event logistics are properly planned and executed
2. Event planninga. Factors sports and entertainment marketers consider when planning an event
i. Working with vendorsii. Facility selection
(a) Click here for an infographic illustrating how the organizing committee for the 2016 Summer Olympic Games is planning the venues for the competitions
iii. Staffing and volunteersiv. Traffic and parkingv. Transportationvi. Securityvii. Concessionsviii. Ticketing and admissionsix. Sponsorshipx. Awards (including award ceremonies)xi. Special accommodationsxii. Weatherxiii. Hotels and lodging
(a) Click here for an infographic illustrating how the organizing committee for the 2016 Summer Olympic Games is planning to create lodging for participating athletes
3. For example, while some members of the Campus Rail Jam Tour were likely tasked with marketing roles in an effort to maximize attendance and attract sponsors, event management personnel would be responsible for event logisticsa. Organizers of the Campus Rail Jam Tour trucked in 30 tons of snow to build a
snowboard and ski course in downtown Portland, OR. Organizers paid a reported $2,500 to have six dump trucks haul snow down from nearby Mount Hood in order to build an appropriate venue for the snow sport competition to take place. 105
b. The event was also successfully marketed as over 6,000 spectators showed up to watch the competition 106
Unit 2 Key Terms Defined:Cross Promotion: The convergence of two entertainment properties working together to market products or servicesCustomer Loyalty: Customer decision to become a repeat consumer of a particular product or brandDiscretionary Income: Money left to spend after necessary expenses are paid Entertainment: Whatever people are willing to spend their money and spare time viewing rather than participating Entertainment Marketing: The process of developing, promoting, and distributing products, or goods and services, to satisfy customer’s needs and wants through entertainment, or any diversion, amusement, or method of occupying timeEvent Triangle: The model for studying the exchanges developed in sports marketingIntangible Product Attributes: The unobservable characteristics which a physical good possesses, such as style, quality, strength, or beautyMarketing: The process of developing, promoting, and distributing products, or goods and services, to satisfy customers’ needs and wantsPerishability: The ability to store or inventory a product Product: Tangible, physical goods as well as services and ideasSports Marketing: The act of using sports as a platform to market products or services and increase sales or the process the of marketing and selling the sports property itselfTangible: Products that are capable of being physically touched
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